Unlike Tirana, however, Moscow had McDonald’s. The McDonald’s was expensive. Everything in Moscow—except the thirty-cent subway—was expensive. The drinks, meals, and hotel rooms were as costly as Monaco’s. And retail prices were no better than in most places on the value-added-tax-plagued continent of Europe. Yet the average wage in Russia is $143 a month. Unless everybody is fibbing. Which they are. Russia’s businesses pay a 35 percent federal tax, plus a 20 percent VAT, plus local taxes that can be as high as 45 percent. That adds up to 100 percent, so a tremendous amount of Russia’s business is conducted via the “informal” economy. And it can be very informal. The way you hail a cab in Moscow is that you don’t. You hail any car, and if the driver feels like it, he’ll stop, negotiate a fee, and take you where you want to go. But some people in Russia don’t have cars—or anything else. Respectable grandmothers beg on the streets. The old folks are broke in Russia. Increases in pension payments have been modest, while inflation has been indecent. In 1988 one ruble was worth $1.59. By mid-’96, one dollar was worth 5,020 rubles. And though money had been printed with abandon, the government ran out of it anyway. At the end of the first quarter of ’96, pensions went unpaid. Then the panhandling golden-agers were all over the place. Things have gotten somewhat better, but there’s still gross poverty in Russia. I talked to economist Sergei Pavlenko, the director of the Working Center for Economic Reform of the Russian Government. He estimated the Russian poverty rate to be 25 percent. You can compare this with the 10 percent poverty rate claimed by the Communists before 1991. But don’t. Pavlenko said that he had to wonder what the Communists considered poverty. The U.S. government sets the poverty threshold at $15,569 a year for a family of four. The Soviet government fixed the poverty line at seventy-five rubles per month. That was $119.05 at the official ruble exchange rate. But as in Cuba, the official exchange rate was a joke. The black-market rate back then varied from ten to fifteen rubles to the dollar, so seventy-five rubles was really something between $5 and $7.50. People were getting nothing under the Communists, too. It’s just that they knew how much nothing they were going to get and when they’d get it. But there’s been more to the high price of freedom in Russia than high prices. You can be mugged these days or even shot if you put your mind to it. Moscow is no longer a town as safe as the tomb it used to resemble after 9 P . M . Random felonies, however, are still fairly rare. Russian crime is more likely to be the
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